Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?
A) Unemployment is inevitable.
B) Resources are not equally useful in all activities.
C) Technology is slow to change.
D) Labor is scarcer than capital.

Question

Quizplus · Accepted Answer

Resources are not equally useful in all activities, which means as production shifts from one product to another, more and more of less suited resources have to be used, increasing the opportunity cost. This is why the production possibilities frontier bows outward.

Generally, Opportunity Costs Increase and the Production Possibilities Frontier Bows